Sovereign Metals Secures Key Graphite Marketing Deal with US Strategic Reserve Link
Sovereign Metals Ltd (ASX:SVM, OTCQX:SVMLF, AIM:SVML, FRA:SVM) has taken a significant step towards becoming a major graphite supplier, signing a non-binding Memorandum of Understanding (MOU) with Traxys North America LLC. This partnership directly connects the company’s Kasiya Rutile-Graphite Project in Malawi to the US government’s ambitious Project Vault initiative, designed to build a domestic strategic reserve of critical minerals.
Project Vault: A $12 Billion Push for Supply Chain Security
Launched earlier this month, Project Vault represents a $12 billion investment – $10 billion from the US Export-Import Bank and $2 billion in private capital – aimed at reducing US reliance on foreign sources, particularly China, for essential minerals. Traxys is one of only three trading houses selected to procure materials for this crucial program.
Kasiya Graphite: Positioned for Strategic Importance
Under the MOU, Traxys will act as the marketing agent for graphite concentrate from Kasiya, initially targeting 40,000 tonnes per annum during the project’s first five years of Stage 1 production. This figure has the potential to increase to 80,000 tonnes per annum as the project expands. The agreement contemplates negotiation of a binding marketing agreement covering five to ten years of production.
Frank Eagar, Managing Director of Sovereign Metals, emphasized the significance of the deal, stating it’s a “significant endorsement of Kasiya’s scale and strategic relevance.” Graphite is officially designated a US Critical Mineral by the US Geological Survey and is a key target for the stockpiling initiative.
Beyond the US: Global Demand for Graphite
The global graphite market is currently dominated by China. This MOU positions Kasiya as a potential alternative large-scale source of flake graphite, attracting interest from Western governments and manufacturers seeking to diversify their supply chains. Initial product focus will be on high-value flake graphite for the refractory market (+100 mesh or larger), with potential expansion into battery anode supply chains.
Traxys CEO Mark Kristoff highlighted the importance of Project Vault, calling it a “groundbreaking initiative” that “bolsters the supply chain of critical minerals for American manufacturers and enhances national economic security.” Major US manufacturers, including General Motors, Boeing, and Google, are also participating in the program.
Financial Details and Future Outlook
Traxys would receive an indicative commission of 6% for marketing and selling graphite on Sovereign’s behalf. Delivery terms are flexible, potentially including FOB Mozambique port, CIF discharge port, or another mutually agreed port of loading. The MOU is non-exclusive and non-binding, excluding standard provisions. Any binding agreement remains subject to board approvals and the existing investment agreement with Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF).
The agreement builds on recent commentary highlighting Kasiya’s potential for rare earth and graphite production, and underscores the project’s positioning within emerging Western critical minerals supply chains.
Frequently Asked Questions
What is Project Vault?
Project Vault is a US government initiative to establish a Strategic Critical Minerals Reserve, investing $12 billion to secure domestic supplies of essential minerals.
Why is graphite considered a critical mineral?
Graphite is essential for various industries, including electric vehicle batteries and refractory materials. The US aims to reduce its dependence on foreign sources, particularly China, for graphite supply.
What is the significance of the MOU between Sovereign Metals and Traxys?
The MOU links Kasiya’s graphite production to Project Vault, potentially securing a significant offtake partner and positioning Sovereign Metals as a key supplier to the US strategic reserve.
Is this agreement binding?
Currently, the MOU is non-binding, but contemplates negotiation of a binding marketing agreement covering five to ten years of production.
Sovereign, Traxys and US Department of State Meeting during Mining Indaba 2026 (Left to Right: Sovereign’s Chief Commercial Officer Sapan Ghai, Managing Director Frank Eagar, Traxys CEO Mark Kristoff and US Department of State Senior Advisor Christopher Kulukundis).
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